Taiwan – More than 80% of US companies in Taiwan have expressed optimism regarding their business outlook for the next five years but they are worried about the local talent available.

According to a survey by the American Chamber of Commerce in Taipei (AmCham), recruiting skilled talent has become a crucial challenge for these companies.

On the quality of Taiwan’s work force, AmCham Chairman Bill Wiseman said local employees are still far from “world class standards”. They still fall short in terms of taking initiative and creativity even though they are hard-working, loyal and well-educated, Wiseman added. “Taiwanese employees are very good at doing what you tell them to do. But if you ask them to solve a problem, they will shy away from that.”

Wiseman said Taiwan’s personal tax rates, which are among the highest in the region, are another reason why skilled talent, especially in the high-tech, financial and management sectors, are less attracted to the country.

Individuals have to pay up to 40% in taxes if they have an annual income of more than NT$4 million (US$130,000).

Government inefficiency is another frustration for US firms even though more than half said their Taiwanese operations are “relatively profitable”. Over half of 117 respondents said the government should improve regulatory consistency and simplify its bureaucracy, no matter which political party is in power.

The 2011 Business Climate Survey, conducted last November, also found that 54% would increase their investments in Taiwan in 2011. Close to three in five said the cross-Taiwan Strait economic cooperation framework agreement (ECFA) would have a positive impact on their business.

Wiseman said the ECFA will make the country more connected to regional opportunities, particularly in China, and will give US firms good reason to increase their investments in Taiwan.